Social Enterprise UK, what we're for and what we're against


Social Enterprise UK launched a report in December called Shadow State, outlining the effect that outsourcing practice is having on the wider economy and calling for greater transparancy. The report is not a response to recent Ministry of Justice announcements about probation contracts, but offers context to this important debate. Originally posted on the SEUK website, Celia Richardson Director of External Affairs, explains the report.



Social enterprises are for innovation in public services. They’re for collaboration. They’re for maximizing social value; co-production; disruptive change. People powered change. All these are lovely concepts and their practical application beautiful to behold. But as well as shouting about what we’re for, sometimes it’s important to shout about what we’re against.

Last year Social Enterprise UK’s research showed that social enterprises in consumer markets were feeling buoyant, growing, diversifying and generally optimistic. And the ones in public service markets were feeling quite the opposite. Planning redundancies, diversifying away from public services, predicting major problems. And they cited public sector procurement as one of their biggest problems.

As consumers seem to be understanding concepts like buying local, buying ethical, making their money go further by changing their spending habits, public bodies seemed to be going in the opposite direction. They are trying to buy more of the same stuff from the same suppliers more and more cheaply, at greater scale. And of course, what they are buying when it comes to children’s services, adult social care, welfare to work, prisons and rehab, boils down to human relationships. How can human relationships be delivered at greater scale, and why should this be done in a way that delivers profits for shareholders - outside agents, who are removed from the service and naturally more interested in short-term profit than innovation, social value or sustainability? 

So at SEUK we started work to build a picture of what was happening in public services. We came across some appalling tales, some hope, lots of confusion, and a great deal of goodwill. We spoke to people involved in the Rochdale children’s home scandal, about the amount of money being made by private equity companies from children’s homes and foster care services. We spoke to our own members about the way they were being treated in the Work Programme. We spoke to academics, public service commissioners, politicians and civil servants about the way that toxic markets are emerging in public services.

And we spoke to local authorities, social enterprises and citizens about the way that they are turning things around in some areas. Their work needs public support. So we launched the resulting product – a report called The Shadow State. It goes way beyond calling for measures that are specific to social enterprise. Ambitious in its scope, it calls for the cleaning up of the markets – with transparency, regulation and much stronger measures for social value. It’s part of our campaign for social value.

Many of our members are delivering world-class

services to the public and they are doing it while

reinvesting their profits, creating social value, 

and having a positive effect on the markets

they’re working in.

By improving the market conditions we know that social enterprises can do better. Many of our members are delivering world-class services to the public and they are doing it while reinvesting their profits, creating social value, and having a positive effect on the markets they’re working in. GLL in leisure services, London Early Years Foundation in early years education, HCT Group in public transport – the list goes on. All those abstract concepts listed above – the innovation, people powered change, collaboration – these organisations are living and breathing it. So at SEUK we are being ambitious for our members and for everyone. We are trying to change the markets and change the terms of the public debate.

Social enterprise in social sector debate has been variously described as  - a muddying of the waters of the charitable sector, a fig-leaf for privatisation, simply a buzz-word and the new big thing. This is within our own sector – the social sector. Attacked from left and right, it is vital that we say where we stand.

The main story here is about unchecked profiteering in our public service markets. It is toxic to our sector and toxic to the general public. And we are against it.

In December we met Margaret Hodge, 

Chair of the Public Accounts Committee

to share our findings with her,

and reader, she kissed us!

Our new report and our campaign are not about calling for more or less outsourcing of public services, but about how public bodies allow the markets to be shaped, and the sort of firms they choose. There’s already an £82 billion market out there and it’s growing fast. We want to leapfrog arguments about what social enterprise is and isn’t, with organisations that should in theory be our closest allies. The whole social sector - public, charity and social enterprise - has major opportunities to turn the tide coming up in the form of the Social Value Act which comes into force on 31 January, and the Public Accounts Committee is calling for evidence on public procurement.  In December we met Margaret Hodge, Chair of the Public Accounts Committee to share our findings with her, and reader, she kissed us!

The arguments about social enterprises and charities in public services within the social sector came up a lot in our work on this campaign. And they always made me think about a cartoon my colleague Nick Temple (Business & Enterprise Director at SEUK) is very fond of. It says ‘Dear Optimist, Pessimist and Realist. While you guys were busy arguing about the glass of water, I drank it. Sincerely, the Opportunist.'